ENGLISH ABSTRACT: This Study Project attempted to understand and analyse the key elements of strategic
alliances in order to develop a practical model and structured approach for business to
successfully justify, identify, assess, select, implement and manage alliances that will
create maximum value for all parties involved and enhance the likelihood of alliance
success. The objective was to obtain an end-ta-end and integrated picture of how to
successfully apply strategic alliance as a business tool in today's dynamic and challenging
business environment.
The study showed that companies of today are facing an overwhelming number of
external and internal challenges and pressures. These challenges are putting increased
pressure on companies' resources, skills, management and other capabilities to develop
new strengths and deliver products and services quicker and at a lower cost. Traditional
methods of addressing these challenges, such as internal resource development or
acquisition of a business that possesses the required capabilities, are proving to be
inadequate and often force companies to sacrifice essential elements such as: speed to
market, organisational agility and control. Strategic alliances offer an alternative.
Strategic alliances can offer significant advantages for companies who are lacking in
particular competencies or resources by securing these through links with partners who
possess complementary skills or assets and may also offer easier access to new markets
and opportunities for mutual synergy and learning. Alliances will avoid the permanency of
strategies such as mergers and acquisitions and enable two-directional exchange of
resources and competencies as apposed to the pure financial nature of outsourcing. The first step in the alliance process is the formulation of the alliance strategy. The
alliance strategy will dictate which partner and alliance form is most appropriate, what the
company expects to get out of the alliance and how risks will be managed. The alliance
strategy is a building block or extension of the corporate strategy and must be aligned
with the mission, goals and objectives that were set by the strategic process. The
formulation of the alliance strategy must be based on an analysis of the external market
circumstances and the company's internal resources and competitive capabilities. By
defining an alliance strategy the company ensures that all alliances-related activities are
consistent and structured.
Once the strategic alliance strategy, objectives and format has been determined the
company can start to identify and select a partner that has got the ability and competency
that is required by the alliance and at the same time has got a similar need to be involved
in the alliance. Partner selection requires a structured process to ensure that the alliance
strategy and selected form is translated into and represented by key business attributes
or areas that are affected by the alliance. The organisation must be clear about what its
strategic objectives are and what the partner profile is it is looking for. These objectives
are linked to criteria or requirements that the potential partner must comply to, in order
to meet the alliance objectives.
The partners are now ready to determine how each organisation will engage with the
other to reach common objectives of the alliance. This is achieved through a process of
negotiation and work definition. The negotiation is 'non zero-sum based' which means
that one company's gain is not at the loss of the other company. The alliance business
plan is developed during this stage and acts as the blueprint of the future alliance
operations. During this stage it is crucial that the leadership of the two companies is
actively involved and visible in the process. Managing strategic alliances introduces a complex combination of new management
challenges that often need to be coordinated and addressed. It is the alliance
management's responsibility to establish a relationship of trust between the companies,
address cultural issues and ensure that there is a continuous process of two-way learning.
These solutions and the original alliance agreement will however be temporary because
the alliance is founded upon relationships that have a dynamic of their own and are
subject to the influence of external changes bearing on the alliance, which requires that
the alliance needs to transform and adapt to these changes on a regular basis.
Strategic alliances are certainly not a new concept in South Africa. But the adoption rate
of strategic alliances seem to be slow compared to world standards and opportunities for
both local and international alliances have not been capitalised on. Alliances can enable
South African companies to remove unnecessary duplication between companies, access
international skills and technology, build on synergies and reach global markets in a cost
effective and swift way.